Hyderabad, Indore, Chennai lead Rs 2.44 lakh cr plot boom as flats lose appeal

India's real estate market is experiencing a notable shift as residential plots gain preference over traditional flat developments. This trend is largely driven by the increasing demand for customisable living spaces and improved infrastructure in Tier II cities. A report by PropEquity highlights that nearly 4.7 lakh residential plots were launched across top cities from 2022 to May 2025, with Tier II cities contributing 52% of this supply.

The estimated value of these launches is Rs 2.44 lakh crore, marking a substantial shift in investment patterns.

Change in plot

Key cities leading this development include Hyderabad, Indore, Bengaluru, Chennai, and Nagpur, among others. In Tier I cities, only Hyderabad, Bengaluru, and Chennai featured in the top 10, collectively accounting for approximately 48% of the total plot launches. This marks a significant move away from high-rise apartments, with plots now forming a major part of real estate portfolios. The first five months of 2025 alone saw the launch of 45,591 residential plots.

Samir Jasuja, Founder and CEO of PropEquity, noted, "Residential plots have become a safe haven for investors seeking flexibility, appreciation potential, and better liquidity post-pandemic. For developers, plots offer quicker cash flow due to faster sales and lower upfront capital requirements compared to apartments." This sentiment underlines the financial and strategic reasons behind the growing preference for plotted developments over flats.

Surge in Tier II cities

The surge in demand is particularly strong in Tier II cities and key southern metros such as Bengaluru, Hyderabad, and Chennai. Jasuja stated, "The surge in demand has been particularly strong in Tier II cities and key southern metros, such as Bengaluru, Hyderabad, and Chennai. With demand for high-rise apartments showing weakness in early 2025, plots are attracting more attention." This trend has been accompanied by notable price growth in cities like Indore, Raipur, Coimbatore, and Mysore in 2024, pointing to the increasing value attributed to residential plots.

Despite the momentum, the overall supply of plots in the top 10 cities fell by 23% year-on-year in 2024, following a 24% increase in 2023. However, certain cities such as Chennai, Coimbatore, and Surat saw gains, suggesting a varied supply response across the regions. Indore led in plot launches last year with 26,538 units, highlighting its prominence in the real estate sector.

Average launch prices

Average launch prices for plots surged by 27% year-on-year in 2024, reaching Rs 3,679 per square foot. As cities continue to expand their infrastructure and residents seek more personalised living arrangements, the trend towards residential plots is likely to continue. This shift not only reflects changing consumer preferences but also highlights strategic alignments by developers looking to optimise cash flow and reduce capital expenditure risks.